FACILITIES MANAGEMENT
4.3 SWOT ANALYSIS OF OMPFM
Figure 9 shows a weighted SWOT analysis, where in we examine what we consider to be OMPFM's more critical strengths and weaknesses and the more pressing environmental opportunities and threats. In addition to this, a few items that are not mentioned in the weighted analysis, as well as all the items listed in the weighted SWOT analysis will also be discussed in more detail.
4.3.1 Strengths
Old Mutual, Old Mutual Properties and the Facilities Management Division have many strengths, but not all of these strengths are often taken advantage of by the company. The strengths include:
~ The Old Mutual Brand is very strong in southern Africa, as the company is well established in South Africa, Namibia and Zimbabwe. As a successful financial institution, which is growing internationally, the brand instills security and peace
THREATS OPPORTUNITIES
Environmental change Competition from Loss of experienced Reduced profitability The opportunity to JV or Alliance with
(OPPORTUNITIES& other established FM and qualified staff to as clients understand expand into Black Empowerment Work closer with other THREATS) service providers other FM Companies the FM business international markets Partnerls Old Mutual Businesses + STRENGTHS
1) Financially stable with
good access to funds +1 0 0 +2 +2 0 +5
2) Old Mutual Brand +3 -1 0 +2 +2 0 +7
3) Qualified and
experienced staff +2 -2 0 +3 +2 +2 +9
4) OMP operations
throughout Southern Africa +2 -1 0 +1 +1 0 +4
5) Long-term relationships
with suppliers +1 0 0 +3 0 +1 +5
6) Extensive database of
information +2 -1 0 +1 0 +1 +4
7) Established procedures +1 0 0 +1 +1 +1 +4
WEAKNESSES 1)Lack of technological
infrastructure -1 0 0 -2 -1 -1 0
2) Weak Empowerment
credentials -2 -1 -2 0 +3 -1 +3
3) Too reliant on a single
client - Old Mutual 0 0 -1 +1 +1 0 +2
4) Poor Marketing -2 0 -2 -2 -1 0 0
Environmental Impact +12 0 0 +14 +12 +5
Scores -5 -7 -5 -4 -2 -2
TOTAL +7 -7 -5 +10 +10 +3
+3 +2 +1
o
is a very good advantage in such a situation is a good advantage in such a situation is an advantage for such a situation no impact
o
-1 -2 -3
no impact
is a disadvantage in such a situation is a large disadvantage in such a situation is a very large disadvantage in such a situation
of mind in the hearts of clients. As most of the Facilities Management contracts are between three and ten years this is an important factor.
~ The competency of the facilities management team can be seen as strength. The team is well qualified, and experienced. Many members of the team have both technical and business qualifications. The team consists of amongst others, electrical engineers, mechanical engineers, civil engineers, quantity surveyors, and architects. Four of the engineers are also registered with the Engineering Council of South Africa.
~ Thediversity of the team enables it to provide a wide range of services, and the team members tend to compliment each other. The team includes both male and female staff members as well as staff from various race groups.
~ OMPFM staff have a good understanding of the FM industry, and has been responsible for many of the innovations within the industry. As the team provides both consulting and facilities management services they understand the clients needs and wants and therefore tend to deliver a good service.
~ Themoral ofthe staffis very high at the moment, and this must be maintained, as this will ensure that the staff is prepared to go the extra mile for the company, and in many cases their clients. Many clients have already commented on the passion that the staff have for their work.
~ OMPFM has got good long-term relationships with many suppliers, and they make good use these relationships in order to obtain new business. As a result of these relationships, the service providers or contractors understand OMPFM's requirements and therefore OMPFM is able to provide consistently high levels of service.
~ OMPFM have a proven track record, and unlike other divisions within OMP have provided their services to a number of external clients.
~ Access to finance and clients who want to enter into long-term relationships see financial stability of the company, as a major strength.
~ OMP have offices throughout South Africa, which allows the company to offer a national service to clients.
~ OMPFM has a large data base of information, which is used to control costs,
compare the performance on various properties and the associated equipment, etc. This could potentially add enormous value to any clients operation.
~ Established procedures. The company has many standard contracts, and other documents, which could be easily adapted to client's situations.
4.3.2 Weaknesses
As with any organization the company does have it's weaknesses, and these include:
~ The Old Mutual brand may be very strong, however the OMPFM brand is not strong and needs to be aggressively developed. Many prospective clients do not know about Old Mutual Properties and the Facilities Management Division. The Old Mutual Brand can also work against the FM division as it is unlikely that competitors to Old Mutual, like Sanlam, Liberty life, Investec, etc, would appoint OMPFM on a facilities management contract. This can then provide opportunities for OMPFM's competitors to establish themselves in the market.
~ The senior management of OMPFM is mainly white males. The profile of the team needs to change to include people from other race groups.
~ As OMP is a subsidiary of Old Mutual, it basically has the same shareholders. It is estimated that Old Mutual Plc currently has a black shareholding of 16%. This is not sufficient if OMPFM plans to secure contracts from government, or other blue chip companies.
~ OMPFM is currently too reliant on a single client, Old Mutual, for the majority of its income. This is a high risk situation for any company and highlights the need for OMPFM to secure work outside of the Old Mutual stable.
~ A major weakness of OMPFM is the lack ofmarketing, which has taken place over the last few years. Companies will not approach OMPFM for tenders or contracts if they are not aware of the team's capabilities.
~ OMPFM does not have established technologythat has been implemented in the organization for computerised maintenance management systems, call center systems, procurement systems and energy management, yet it is offering these services to the market.
~ All the divisions within OMP are not working together as a unit, and should be working towards the goals of the company and not only the particular division.
Different divisions are not helping to develop each other, but are rather criticizing
4.3.3 Threats
This could be seen as anything that would have an impact on the company's profitability, and includes:
~ As OMPFM have a very experienced and qualified team, there is a major risk of loosing staff to other FM companies. This staff will then take with them knowledge of OMPFM's operations and impart this onto the new company. As the team looses staff it also looses the opportunity for obtaining new business, as the staff take with them the relationships that they have developed over time.
~ Unsophisticated and sceptical client base, which needs to be educated. Clients could change from outsourcing to in sourcing.
~ Competition from other established FM companies. There could also be attacks against OMPFM in the market, as OMPFM is seen as a relatively new participant.
~ Fees for services rendered may reduce in the future, as clients become more educated in the facilities management industry, therefore resulting in reduced profitability.
~ Lack of experienced and skilled staff in the market, as OMPFM grows.
4.3.4 Opportunities
This is an important area, as it could reshape the company's strategy. Opportunities must be identified in terms of profitability and growth prospects.
~ Most facilities management companies have a black shareholding of around twenty five percent. OMPFM could form an alliance or joint venture with some black empowerment partners, which could have a black shareholding of around fifty percent.
~ Forming strategic alliances with other service providers, in order to provide any client with a "one stop shop" facility. The services could include energy management, space planning, interior design, etc.
~ With the government that is privitising many of the state owned assets, such as Spoornet, Telkom, etc, opportunities will arise as they outsource many of the services in the future. Many tertiary institutions are being amalgamated into single operations, which will also create opportunities.
~ As many of the larger organizations alter their strategies in order for them to focus on the core business activities, opportunities arise for the facilities management service providers.
~ Old Mutual and it's sister companies like Mutual & Federal and Nedcor could potentially save millions of Rands if all of their facilities management services are provided by OMPFM, therefore keeping all the money in-house, thus increasing it's profitability.
As can be seen from Figure 4.1, the Old Mutual Brand and the experience and qualifications of OMPFM's staff appear to be the major strengths for the team, however the major weaknesses appear to be the, insufficient marketing currently undertaken by OMPFM and the lack of empowerment credentials. Major threats appear to come from the established competitors and the possibility of the loss of experienced staff. The market opportunities appear to be to grow the operation internationally as well as form an alliance or new business venture with black partners.